Notes for Chat with Traders, Episode 124

Added on by C. Maoxian.

Episode 124 -- "madaznfootballr" (72:58)

  • "Max"
  • Born in 1989?
  • Lives in California
  • Trading for six years
  • "Scalper"
  • "Rebelling against societal norms"
  • Made $5 an hour counting cards in blackjack
  • Sold stuff on eBay that he found or found mis-priced in stores
  • Studied structural engineering in college
  • Couldn't get a job after the Great Financial Crisis
  • Lots of student loan debt
  • Even when he did find an engineering job, it was a disappointing one
  • Colleague showed up in Lotus Elise, made money buying BP after oil spill
  • Max knew nothing about the stock market then
  • Opened an E*Trade account with $6,000
  • DANG first stock he ever bought, looking at 15-minute delayed quotes
  • Eventually found out about live quotes and E*Trade Pro
  • One year of trial and error, "completely clueless," no one to guide him
  • Started googling "hot stocks" and "stock tips" led him to message boards
  • Learned you must be a completely independent thinker
  • Almost quit in first year, suffered losses and a "damaged psyche"
  • Cumulative process, one day everything just clicked
  • Pattern recognition acquired after a year
  • In hindsight, he should have paper traded
  • "Money-hungry kid" deprived of a good career
  • Would go all-in on lots of trades
  • Play small until you acquire the necessary skills
  • He was too impatient in early days
  • Don't overextend yourself
  • Trading is not easy, it's true that 90% of traders fail
  • It's the psychological aspect that makes people fail
  • Worked as engineer for three years, and snuck trades on the side
  • Saved five times his salary ($300K total) and made two years of six figure gains before going full time
  • Traded early in the morning before going to his 9 to 5 job
  • Traded OTC and penny stocks at first
  • Naturally impatient person, naturally anxious person
  • Scalping suits his personality
  • Gets in and out extremely fast
  • "Typical" holding period of two to three minutes
  • "Typical" number of roundtrips per day: twenty
  • You have to be quick manually and make quick decisions
  • Hotkeys are huge, without them like bringing knife to gunfight
  • Has price levels pre-entered (limit orders, I guess)
  • Always uses limit orders, never market orders
  • Gets up at 6AM (Pacific time)
  • Looks for low float, low priced stocks gapping up biggest, "top gapper," large volume
  • Started with one minute bars but switched to three minute bars
  • ThinkOrSwim had three minute time intervals as default
  • The "tape" is main thing he uses to make trades, hard to explain
  • Spotting "Iceberg" orders ... "bid prop" and "refreshing seller"
  • Record your screen: Level 2 and Time and Sales and the Chart and re-watch in slow motion
  • VWAP gained prominence in recent years (2013 2014)
  • Over / Under VWAP ... 
  • Need to be mentally stable and confident to trade
  • Meditates and tries to enjoy life to clear his mind
  • If you have addictive personality, self-control or anger issues -- they will come out in trading
  • Don't trade during low volume hours, just walk away
  • Identify if you have an addictive personality
  • Give back to the community
  • Comes from very humble beginnings, never been interviewed before
  • www.madazmoney.com
  • Twitter: @madaznfootballr